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TMI Blog2018 (10) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... elay. It is also observed from the facts that the department has initiated simultaneous proceedings against the assessee as well as the vendor. Therefore, the facts of the case law relied upon by the Ld.CIT(A) are distinguishable and not applicable to the assessee’s case. Since, the facts of the assessee's case are identical to the decision of the Tribunal in the case of Bheemarasetty Sunitha [2017 (8) TMI 476 - ITAT VISAKHAPATNAM], respectfully following the view taken by this Tribunal, we hold that the notice issued by the AO in this case is beyond 4 years and the same is barred by limitation. Therefore, we set aside the order of the CIT(A) and quash the orders passed u/s 201(1)/201(1A) by the AO and allow the appeal of the assessee. - I.T.A.No.547-550 /Viz/2017 - - - Dated:- 12-10-2018 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Assessees : Sri I Kama Sastry, AR For The Revenue : Sri V.Rama Mohan, DR ORDER Per Bench : These appeals are filed by the assessees against the orders of the Commissioner of Income Tax(Appeals) [CIT(A)]-10,Hyderabad vide I.T.A No.0037-0040/CIT(A)-10/2015-16dated 07.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter called as Act ). In this case, the assessees have purchased the property jointly from Sri Jamisetty Subrahmanyam, a non-resident as per the details given below for a consideration of ₹ 31,10,000/- each: Document No. Date of Registration Extent location of property Amount Remitted (Rs.) Name of the buyer 109/2008 09.01.2008 RCC Building admeasuring 2,820 sft and 130.16 sq.yards site at D.No.13-25- 9/1 2, Maharanipeta, Visakhapatnam 31,10,000 (M.V.55,58,000) Shri Malla Appalanaidu and 3 others, Visakhapatnam 110/2008 09.01.2008 RCC Building admeasuring 3,510 sft and 130.16 sq.yards site at D.No.13-25- 9/1 2, Maharanipeta, Visakhapatnam 31,10,000 (M.V.60,17,000) Shri Malla Appalanaidu and 3 others, Visakhapatnam 6. Sri Jamisetty Subrahmanyam being non resident, the assessees are required to deduct tax at source u/s 195 of the Act for the payments made to non-residents. But the assessees h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8,46,000*551/426) 15,23,040 4,28,801 in FY 200102 110/2008 Building admeasuring 3,510 sft 09.01.2008 F.Y.2001-01 10,53,000 (Approx @ ₹ 300/sft in F.Y.200102 13,61,979 (10,53,000*551/426) 19,82,040 6,20,061 Total LTCG on building 10,48,862 Total LTCG on site and building : a. From sale of land : Rs.72,38,900 b. From sale of building : Rs.10,48,862 Total LTCG Rs.82,87,762 Since the assessees have paid the sum of ₹ 62,20,000/-, the AO treated assesses as assessee in default for their share of capital gains tax of of a sum of ₹ 62,20,000/- and accordingly raised the demand of ₹ 5,99,017 per he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers on 30.03.2015 simultaneously. The Ld.AR submitted that the AO has taken simultaneous action u/s 147 as well as u/s 201(1)/201(1A) in Mar 2015, therefore, the observation of the Ld.CIT(A) that the AO of the vendor was conducting the enquiries and there was no inaction on the part of the AO is far from the truth. The Ld.AR argued that in the instant case till such time, the notice was issued u/s 201/201(1A), neither the AO of the vendor nor the AO of the assessee have initiated any action, thus, the decision of Hon ble Allahabad High Court is distinguishable and has no application in the assessees case. The Ld.AR submitted that the notice was issued by the AO on 02.03.2015 and the assessment year involved was 2008-09 relevant to the financial year 2007-08. The notice was issued beyond the 4 years of time limit, hence argued that the notice issued by the AO is invalid. Thus requested to cancel the orders passed by the AO u/s 201(1)/201(1A) of the Act. The Ld.AR relied on the decision of this Tribunal in the case of Bheemarasetty Sunitha in I.T.A.No.119/Viz/2016 dated 23.06.2017 and also A.P.High Court Judgement in the case of CIT-II, Hyderabad Vs. U.B.Electronic Instruments L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. As per sub section 3 of the Section 201, the time limit is provided for taking action in respect of residents in India, but there is no time limit for non-residents. The identical issue has come up before this Tribunal in the case of Bheemarasetty Sunitha cited supra and this Tribunal after considering the decisions of Hon ble Delhi High Court in the case of Bharti Airtel Limited Anr Vs. Union of India Anr and the decision of NHK Japan Broadcasting Corporation [305 ITR 0137], the decision of Hon ble Supreme Court in the case of GE India Technology Centre and the decision of Hon ble Bombay High Court in the case of Mahindra Mahindra Ltd. [365 ITR 0560 (Bom)] held that the reasonable time limit for issue of notice u/s 201(1)/201(1A) is 4 years. In case, the notice is issued beyond 4 years, the Coordinate Bench of ITAT held that the same is barred by limitation. For the sake of clarity and convenience, we extract relevant part of the order of this Tribunal in para No.6 to 7 which reads as under : 6. We have heard both the parties and perused the materials placed on record. The relevant provisions of section 201(1A) of the Act is reproduced as under: 201(1A) Without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Hon ble Supreme court decision in CIT Vs.Vegetable Products Ltd., 88 ITR 192 (SC) and CIT Vs. Karamchand Premchand Ltd (1960) 40 ITR 106, we are also of the view that the decision favourable to the assessee is required to be taken. Accordingly following the decision of Hon ble Delhi High Court we hold that reasonable period is 4 years for initiating of proceedings u/s 201/201(1A). In the instant case the property was registered on 18.7.2007 and the assessee is liable to deduct the TDS during the F.Y.2007-08 and the 4 years time limit for initiating action u/s 201/201A expires before March 2012. In the instant case, notice u/s 195 treating the assessee as assessee in default was issued on 11.08.2013 beyond the 4 years of the financial year in which the assessee required to deduct tax at source. As held by Hon ble Delhi High Court, the time limit for initiating the proceedings u/s 201 and 201(1A) is 4 years and it is barred by limitation. Therefore, following the decision of Hon ble Delhi High Court, we are unable to sustain the orders of the lower authorities. Accordingly, the order passed u/s 201 / 201(1A) is set aside and the appeal of the assessee is allowed. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an NRI. and liable to pay capital gain tax as land sold was an urban land, which was also supported by return of income for A.Y. 2006-07. In the instant case the fact that the vendor is NRI was recorded in the sale deed itself, as evident from the Ld.CIT(A) s order and he is the resident of 7690A, Green Meadow, USA. Having recorded the residential status in sale deed no extra time is required to prosecute the matter against the payee and the payer. In the case of the decision of Hon ble Allahabad High Court relied upon by the Ld.CIT(A), it was indicated that all the vendors are shown as residents of India. The assessing officer was under the impression that the vendor was resident of India, thus taken the time for initiating the proceedings u/s 201(1)(1A) of the act. Where as in the instant case residential status was recorded in the sale deed and the AO determined the nil demand in the assessment in representative capacity. The department could not demonstrate the reasons for delay. It is also observed from the facts that the department has initiated simultaneous proceedings against the assessee as well as the vendor. Therefore, the facts of the case law relied upon by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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